Time of Adjustment: Estimating Immigrant Integration and Integrative Capacity of the Finnish Labor Market in the Long-Term Perspective

Journal of Social Research & Policy, Volume: 8, Issue: 2, pp. 37-59

Date: December 2017

ISSN: 2067-2640 (print), 2068-9861 (electronic)

Abstract: This paper examines the integrative capacity of the Finnish labor market as regards immigrant integration in the longterm perspective. In this paper, we study the duration patterns of unemployment and the determinants of transitions out of unemployment spells into employment and other exit states. We also look at, how micro-level determinants of unemployment, when estimated by age, gender, education, and previous experience of unemployment, affect the outcome of transitions out of unemployment spells. The novelty of this research lies in the multidimensional analysis of labor market integration using data and statistical methods that enable to determine the dynamics of status transitions over time. Methodologically, this research has a dualistic ‘descriptive-dynamic’ understanding of labor market integration as a process that is conditioned by a time period of long-term involvement into the labor market. According to our results, transitions to employment have a periodic wavelike character and, in time, the probability for job placement to one of the forms of employment essentially decreases. We also find that the period-effect potentially predict the further labor market integration of immigrants.

Keywords: Labor Market Integration; Integrative Capacity of the Labor Market; Discrete-Time Hazard Models; Duration of Unemployment; Labor Market Transitions.